Millennials, tired of sprawl and lengthy drive times, want to live in downtowns and are willing to downsize into smaller housing to do so.

Grand Rapids-based Urbaneer LLC wants to help them.

The company, a tenant at the Start Garden incubator downtown, has closed on more than $1 million of a planned funding round of $1.5 million. Raul Fernandez, vice chairman and owner of Washington, D.C.,-based Monumental Sports & Entertainment, and Wakestream Ventures LLC, the DeVos family office in Grand Rapids, led the funding.

Previously, Urbaneer was a proof-of-concept unit at Grand Rapids-based Rockford Construction testing the theory that it makes commercial sense to design smaller, smarter living spaces for urbanites.

Through subcontractors, Urbaneer designs and builds movable walls, wall beds, wall tables and kitchen islands that go from coffee-table height to counter height to provide functionality to smaller living spaces. The company received two patents on its movable walls in 2015.

For example, a couple renting a 900-square-foot apartment in a downtown doesn't need as much square footage in their bedroom during the day as at night. So, Urbaneer designed a wall that moves back at night to make a full-size bedroom and moves the other way by day to make the bedroom tiny and turn a cramped space on the other side of the wall into a comfortable dining area.

In January, Forbes featured Urbaneer in an article on intriguing gadgets for home use that were on display at the Consumer Electronics Show in Las Vegas. Urbaneer's $8,000-plus wireless kitchen featured counters with built-in wireless power for mobile devices, laptops and other smart kitchen appliances.

"We want to design the right housing for a changing population that wants smaller, more efficient spaces," said Bruce Thompson, Urbaneer's co-founder and president. "People moving into cities won't need as much space or have as much stuff. We want to be that company that builds the next generation of building spaces."

Thompson said Urbaneer employs four full-time employees and four contractors and will use the current funding round to ramp up sales and marketing and on product development.

"Where we live and how we live is changing. Our cities are changing. As a result, developers and builders are seeking new solutions that create more livable spaces. Urbaneer is a new breed of company, with a powerful vision, and its products are creating the next generation of living spaces," said Wakestream Investment Director Kim Pasquino.

Experienced innovator

"Urbaneer's sweet spot is how we create a smarter space that works more efficiently in urban spaces as real-estate costs go up with demand and as people want to return to cities," said Paul Moore, a director at Start Garden. "Bruce is one of those seasoned and smart guys who blows up the mythology of startups being incubated out of dorm rooms. The ones that grow really smart and really fast are grown by people who have been successful in other areas."

Indeed, Thompson's CV goes well beyond the dorm room.

In 1988, he founded Online Management Services in Colorado, which he acknowledges was too far ahead of the Internet curve and went out of business two years later. He has also worked with Grand Rapids-based Computer Design Inc., an early developer of computer-aided design systems; joined MCI Telecommunications' new business development team in Washington, D.C.; was vice president of corporate development for Washington-based Proxicom, a systems integrator Fernandez founded; and was VP of corporate development at Virginia-based Objectvideo, which provides video software for security, public safety and business intelligence.

Thompson later returned to his hometown of Grand Rapids as a partner in RC Logistics before becoming chief strategy officer at Rockford Construction. He and Rockford CEO Mike VanGessel co-founded Urbaneer in 2013.

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Urbaneer

Rendering shows 800-square-foot model house in Grand Rapids built with Urbaneer designs.

Manufacturing community

"Western Michigan is a really good place to do this. The office-furniture industry means there is an established supply chain for us," said Thompson.

West Michigan is home to Grand Rapids-based Steelcase Inc., Zeeland-based Herman Miller and Holland-based Haworth among other furniture manufacturers.

Jennifer Boezwinkle, Rockford's vice president of communications and strategy, said the construction, real-estate development and property-management company wanted to get ahead of trends in the market place. Engineering News-Record ranks Rockford as one of the top 150 contractors in the nation. Founded in 1987, the company claims projects totaling nearly $4 billion in more than 800 cities across the U.S.

"Millennials prefer to live in cities," Boezwinkle said. "But with an influx to cities like Grand Rapids, the supply gets very expensive, which is why the small-space movement is growing."

Rockford has incorporated some Urbaneer designs in two of its recent redevelopment projects. Two Urbaneer apartments were built at the 18-unit 600 Douglas project as models. Some Urbaneer design was included in all 99 apartment units at The Morton, a rehabbed building built in the late 1800s in downtown Grand Rapids. The Morton apartments range from 500 square feet to 1,200 square feet. Rockford and Urbaneer also built a small demonstration house in Grand Rapids.

So far, Thompson said, 400 living units in projects in Traverse City, Detroit, Washington, D.C., Chicago, New York City and Austin, Texas, have incorporated Urbaneer design.

"We are extremely jazzed about this. We showed we could do it in a renovation as well as in new construction," said Boezwinkle. "Affordable housing is a challenge in Grand Rapids, and this is certainly a piece of the solution. And there are opportunities moving forward in student housing, in senior housing and in creating a better work environment. It's all about creating spaces that can transform."